Eurex Clearing recognizes the challenges of implementing a successful central counterparty (CCP) service for the securities lending market and outlines the characteristics and objectives of a CCP business model.
Eurex Clearing published its written response to an initial report on “A Central Counterparty in the European Equity Securities Lending Market”, released recently by The International Securities Lending Association (ISLA) CCP Working Group. Eurex Clearing recognizes the challenges of implementing a successful central counterparty (CCP) service for the securities lending market and outlines the characteristics and objectives of a CCP business model.
A CCP acts as legal counterparty between lenders and borrowers and takes responsibility for all the obligations related to the securities lending transactions. Therefore, the CCP mitigates the counterparty risk and the credit exposures for the individual market participant as well as significantly reducing the systemic risk for the market as a whole.
“The market participants seek ways to reduce the counterparty risks and improve the operational efficiency in the post-trade environment”, said Thomas Book, member of the Eurex Executive Board and responsible for clearing. “Eurex Clearing will offer a solution that addresses these challenges and will fulfill the requirements of the securities lending market as set out in the ISLA report.”
Europe’s largest clearing house will introduce its first
CCP service for Quadriserv’s AQS platform for European equities in the beginning of 2010.
© Eurex
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